The Baseline    
08 Aug 2022, 04:30PM
Which stocks did superstar investors buy in Q1FY23?
By Abhiraj Panchal

Investors take a keen interest in the stocks that superstar investors like Big Bull Rakesh Jhunjhunwala, Sunil Singhania, Ashish Kacholia, Dolly Khanna and others are buying. We take a look at which stocks some of these Superstars bought during Q1FY23.

As the market took a bearish turn in Q1FY23, Rakesh Jhunjhunwala, Sunil Singhania, Ashish Kacholia, and Porinju Veliyath’s net worth also fell as a result. They still made new bets and doubled down on some older ones. However, Radhakishan Damani did not make any new additions to his portfolio during the quarter. 

Rakesh Jhunjhunwala buys Escorts Kubota in Q1FY23, after cutting his stake in Q4FY22

Rakesh Jhunjhunwala’s net worth in Q1FY23 fell 24.7% QoQ to Rs 25,425.9 crore. He did a U-turn on Escorts Kubota – he  bought a 1.4% stake in the company in Q1FY23, after he had cut his stake to below 1% in Q4FY22.  Before that cut, he had a 5.2% stake in the auto company in Q3FY22. 

While the auto sector is in recovery, Escorts Kubota is still struggling with costs - the company’s net profit declined 26.3% QoQ in Q1FY23 due to a steep rise in commodity prices. During Q3FY22 the stock rose by 22.9% but fell 11.1% in Q4FY22. It looks like the big bull bought the stock when it was trading at lower levels in Q1FY23. From April 1 till August 8 the stock has fallen 3%.  

Sunil Singhania’s Abakkus Fund adds five new stocks in Q1FY23

Sunil Singhania’s Abakkus Fund saw its consolidated net worth fall 28.5% QoQ in Q1FY23 to Rs 1,613.3 crore. During the quarter, the Abakkus Fund purchased new stakes in multiple companies - a 2.7% stake in J Kumar Infraprojects, a 1.9% stake in Stylam Industries, a 1.3% stake in Paras Defence and Space Technologies, a 1.1% stake in CMS Info Systems, and a 1.3% stake in Ethos

The fund also added stakes in small-cap companies like HIL, Ion Exchange (India), Technocraft Industries (India), Sarda Energy & Minerals, Siyaram Silk Mills, IIFL Securities, and HG Infra Engineering during the quarter.

The Abakkus Fund also bought additional stakes in existing holdings, like a 1.2% stake in Hindware Home Innovation (now holds 4.8%) and a 0.9% stake in Rupa & Company (now holds 4.1%).  

Ashish Kacholia was the most active Superstar buying stocks in Q1FY23

Ashish Kacholia’s net worth fell 21.6% QoQ to Rs 1,536.3 crore in Q1FY23. Kacholia bought a fresh 4.2% stake in micro-cap company Inflame Appliances. The company makes kitchen appliances like gas stoves, cooker hoods, and cooking ranges. Kacholia also bought a new 3.6% stake in another micro-cap firm – Repro India. He added the restaurant chain Barbeque-Nation Hospitality to his portfolio with a 1.1% stake during Q1. He increased his stake in another houseware company La Opala RG by 0.4%, bringing his stake to 1.4%. 

The marquee investor also added a 0.5% stake in Gravita India and a 0.4% stake in Faze Three, and he now holds total stakes of 1.8% and 5% in these companies respectively. In Xpro India, Kacholia increased his stake for four consecutive quarters since Q2FY22 and now holds a 3.9% stake. The other companies where he increased stakes are United Drilling Tools, Fineotex Chemical, Yasho Industries and Genesys International Corporation.

A Vijay Kedia pick more than doubles since the start of Q1FY23

Vijay Kedia’s net worth rose 13.8% QoQ to Rs 493.9 crore. He added a 0.7% stake in industrial machinery producer Elecon Engineering Company. He now holds a 1.9% stake in the company. The stock rose by nearly 125.7% since April 1, 2022. Kedia also added a 0.1% stake in Vaibhav Global, an online retailer that manufactures fashion jewellery and lifestyle accessories. 

Dolly Khanna adds six small-cap companies to her portfolio in Q1

Dolly Khanna’s net worth rose 30% to Rs 511.8 crore in Q1FY23. She bought a fresh 3.3% stake in Chennai Petroleum Corp, which has gained 103% since the beginning of Q1FY23 till August 8. She purchased a 1.8% stake in Monte Carlo Fashions, a branded apparel company. Her stake in Monte Carlo fell below 1% in Q4FY22. 

Khanna also bought a 1.2% stake in Zuari Industries and Suryoday Small Finance Bank and a 1.1% stake in both National Oxygen and Manali Petrochemicals. She increased her stake in Pondy Oxides & Chemicals by 0.3% to 3.9% during Q1FY23. She also bought minor stakes in Tinna Rubber & Infrastructure, Ajanta Soya, and Prakash Pipes.

Porinju V Veliyath adds two micro-cap companies to his portfolio in Q1FY23

Porinju V Veliyath bought a 1.3% stake in the agrochemical maker TCM. The company’s stock rose 43.5% from the beginning of Q1FY23 till August 8. The other purchase he made in Q1 was a 0.6% stake in micro cap real estate technology company Aurum Proptech. He now holds a 1.7% stake in the company.

Mohnish Pabrai ups his stake in a petrochemical maker

Mohnish Pabrai’s net worth fell 7.4% QoQ to Rs 1,185.6 crore in Q1FY23. He raised his stake in Rain Industries by 0.5% to 8.4%. Otherwise, there were no major changes to his portfolio in Q1FY23. Rain Industries’ stock is down 4.7% since the beginning of Q1FY23 till August 8.

2 Comments
nageshrajanna1 This is an interesting read. Can you share the same performance analysis for them for Q4 Vs Q3 FY22 and Q3 Vs Q2 FY22??? Thanks
09 Aug 2022, 01:35PM
09 Aug 2022, 06:00PM
Trendlyne Marketwatch    
08 Aug 2022, 03:30PM
Market closes higher, Zensar Technologies' Q1 net profit falls 42% QoQ to Rs 75 crore

Trendlyne Analysis

Indian indices closed in the green, with the Indian volatility index, India VIX, rising over 19%. The Nifty 50 rose over 125 points and closed above the 17,500 mark. European shares bounced back from their fall on Friday and traded higher. Asian indices closed mixed, tracking the US indices, which closed mixed on Friday. US stocks closed mixed as stronger than expected US jobs report raised concerns about the US Federal Reserve maintaining its aggressive monetary policy to tackle inflation. The tech-heavy index, NASDAQ 100 fell 0.8% while the Dow Jones closed 0.2% higher. Brent crude oil futures traded flat after falling about 9% last week amid demand concerns.

Nifty Smallcap 100 and Nifty Midcap 1000 closed in the green, following the benchmark index. Nifty Metal and Nifty Auto closed higher than Friday’s levels. Nifty IT closed flat, despite the NASDAQ 100 closing in the red on Friday.

Nifty 50 closed at 17,525.10 (127.6, 0.7%) , BSE Sensex closed at 58,853.07 (465.1, 0.8%) while the broader Nifty 500 closed at 14,993.35 (93.0, 0.6%)

Market breadth is in the green. Of the 1,917 stocks traded today, 1,017 were in the positive territory and 851 were negative.

  • Crisil, Thermax, SIS, and Carborundum Universal are trading with higher volumes as compared to Friday.

  • Hindustan Aeronautics sees a long build-up in its August 25 future series as its open interest rises 10.6% with a put-call ratio of 0.72.

  • Spicejetfalls in trade after IDFC, YES Bank, Indian Bank categorize the loans in the airlines' name under the high-risk category, according to reports.

  • Stocks like Asian Paints, Pidilite Industries, Bajaj Finance, MRF, and Adani Total Gasare in the overbought zone, according to the technical indicator relative strength index or RSI.

  • Marico is rising as its Q1FY23 net profit grows 4.2% YoY to Rs 371 crore. Headwinds in sales of Saffola Oils results in a muted rise in revenues of 1.3% YoY to Rs 2,558 crore. Drop in cost of raw materials aids the EBITDA margin to grow 300 bps YoY to 31.2%.

  • Zensar Technologies touches a 52-week low of Rs 226.2 as its Q1FY23 net profit falls 42% QoQ to Rs 75 crore. However, revenue rises 4% QoQ with revenue from digital and application services increasing 4.9%. Revenue from the US and Europe regions grow more than 2% QoQ in constant currency in Q1.

  • Aditya Saraogi, Chief Financial Officer at Birla Corp, says that Q2FY23 would be a seasonally weaker quarter for the cement industry. He expects the company's EBITDA per tonne for FY23 to be around Rs 750 per tonne and volumes to grow at 15%.

  • Capital goods stocks like Hindustan Aeronautics, Siemens, Suzlon Energy, Grindwell Norton, and KNR Constructions are rising in trade. The broader sectoral index BSE Cap Goods is also trading in the green.

  • Promoter & Director Vishad D Mafatlal sells 1.5 lakh shares (0.3% stake) worth Rs 64.3 crore in Navin Flourine International in an insider trade on Friday. Mafatlal says this trade was done for charity and personal reasons.

  • Affle (India) trades flat despite its Q1FY23 net profit rising 52.6% YoY to Rs 54.4 crore. Revenue from cost per converted user (CPCU) services rises 144% YoY across India and international markets. This helped total revenue to rise 127.9% YoY to Rs 347.5 crore.

  • Sudarshan Chemical Industries is trading with more than six times its weekly average trading volume. Mahanagar Gas, ZF Commercial Vehicle Control Systems India, Hitachi Energy India, and BASF India are trading at more than three times their weekly average trading volumes.

  • Edelweiss maintains its ‘Buy’ rating on Aditya Birla Fashion & Retail with a target price of Rs 398. This indicates an upside of 43%. The brokerage remains positive on the company’s prospects as its margins expanded during Q1FY23 despite inflationary pressure. It believes the company’s growth momentum will continue in the coming quarters due to price hikes, an improving product mix, and a recovery in the Pantaloons segment. The brokerage expects the company’s revenue to grow at a CAGR of 25.8% over FY22-24.

  • Metal stocks like JSW Steel, Tata Steel, Vedanta, Hindalco Industries, Jindal Steel & Power and NMDC are rising in trade. The broader sectoral index BSE Metal is also trading in the green.

  • Mahanagar Gas is rising despite its Q1FY23 net profit falling 9.2% YoY to Rs 185.2 crore. Profit falls as the cost of natural gas jumps more than 5X YoY. Its revenue grows 2.4X YoY on total gas sales rising 44% YoY driven by soaring compressed natural gas sales. However, the rise in sales is offset by elevated prices of natural gas, leading to its operating margin dropping by 27.7 percentage points YoY.

  • Tata Motors' arm Tata Passenger Electric Mobility inks an agreement to acquire Ford India's manufacturing plant situated at Sanand, Gujarat for Rs 725.7 crore

  • Bharat Petroleum Corp is falling as it incurs a loss of Rs 6,147.9 crore in Q1FY23 compared to a profit of Rs 2,872.8 crore in Q1FY22. The loss is due to the company not raising fuel prices despite a significant increase in input costs. However, its revenue rises 70.7% YoY to Rs 1.21 lakh crore on a 22.1% YoY increase in market sales and higher turnout at its fuel stations. The company's gross refining margin surges more than 6X YoY as the refining business benefits from the elevated prices of petroleum products.

  • FSN E-commerce Ventures (Nykaa) is rising as its Q1FY23 net profit grows 33.2% YoY to Rs 4.5 crore. Rise in gross merchandising value of the fashion and beauty and personal care segments aids the revenue to increase by 40.5% to Rs 1,148.4 crore.

  • Blue Star is rising in trade after it bags three rural water supply project orders worth Rs 375 crore from the Department of Rural Water Supply and Sanitation (RWSS), Government of Odisha.

  • Crompton Greaves Consumer Electricals' promoter Temasek Holdings' arm MacRitchie Investments sells 2.02 crore shares (3.2% stake) in the company through a bulk deal on Friday. Temasek now holds a 2.74% stake in the company.

  • One97 Communications (Paytm) is rising despite its net loss widening to Rs 645 crore in Q1FY23 compared to Rs 382 crore loss in Q1FY22. Employee benefits expense and marketing costs surge 160% and 131% YoY respectively. However, revenue also increases 88.5% YoY. Gross merchandise value increases 101% YoY as average monthly transacting users rise 49% YoY to 7.4 crore users. The value of loans disbursed from its platform rises more than 7X YoY across segments like postpaid loans, personal loans and merchant loans.

  • State Bank of India’s Q1FY23 net profit falls 6.7% YoY to Rs 6,068 crore because of a mark-to market (MTM) loss on the investment book, as bond yields fall. Non-interest income also falls 80% YoY. Net interest income rises 12.8% YoY with net interest margins rising marginally by 8 bps to 3.2%. The asset quality of the bank improves as gross NPA rises 141 bps to 3.9% in Q1.

Riding High:

Largecap and midcap gainers today include Hindustan Aeronautics Ltd. (2,146.40, 7.47%), JSW Energy Ltd. (306.25, 7.16%) and One97 Communications Ltd. (829.60, 5.78%).

Downers:

Largecap and midcap losers today include Alkem Laboratories Ltd. (2,970.95, -4.56%), Hindustan Petroleum Corporation Ltd. (239.75, -4.37%) and Bharat Petroleum Corporation Ltd. (324.65, -3.49%).

Riding High:

Largecap and midcap gainers today include JSW Energy Ltd. (311.65, 9.04%), Hindustan Aeronautics Ltd. (2,154.00, 7.85%) and One97 Communications Ltd. (834.95, 6.46%).

Downers:

Largecap and midcap losers today include Hindustan Petroleum Corporation Ltd. (239.05, -4.65%), YES Bank Ltd. (16.00, -3.90%) and Alkem Laboratories Ltd. (2,995.00, -3.78%).

Crowd Puller Stocks

24 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included HFCL Ltd. (74.50, 9.48%), Aegis Logistics Ltd. (288.05, 8.68%) and Mahindra Holidays & Resorts India Ltd. (255.05, 8.00%).

Top high volume losers on BSE were Sudarshan Chemical Industries Ltd. (456.00, -6.31%), Hindustan Petroleum Corporation Ltd. (239.05, -4.65%) and KEC International Ltd. (404.60, -4.58%).

Heidelberg Cement India Ltd. (192.80, 2.83%) was trading at 7.5 times of weekly average. Mahanagar Gas Ltd. (818.00, 4.18%) and AstraZeneca Pharma India Ltd. (3,155.50, 2.48%) were trading with volumes 6.0 and 5.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

16 stocks overperformed with 52 week highs, while 2 stocks were underachievers and hit their 52 week lows.

Stocks touching their year highs included - Aegis Logistics Ltd. (288.05, 8.68%), Great Eastern Shipping Company Ltd. (519.80, 2.49%) and Grindwell Norton Ltd. (1,987.30, 1.25%).

Stocks making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (663.75, -1.32%) and Zensar Technologies Ltd. (229.90, -7.09%).

22 stocks climbed above their 200 day SMA including HFCL Ltd. (74.50, 9.48%) and JSW Energy Ltd. (311.65, 9.04%). 15 stocks slipped below their 200 SMA including KEC International Ltd. (404.60, -4.58%) and SJVN Ltd. (28.15, -2.26%).

The Baseline    
05 Aug 2022
Five Interesting Stocks Today
  1. Dr. Lal Pathlabs: This diagnostic company’s stock rose close to 11% in the past week till Thursday despite its weak Q1FY23 results. Both revenue and net profit fell YoY in Q1FY23 mainly due to a high base in Q1FY22 as the company benefited from Covid testing revenues. As a result, it features in this screener which lists companies that posted a YoY fall in quarterly revenue and net profit.

Revenue fell 17.1% YoY to Rs 502.7 crore in the June quarter while the net profit declined by 56%. However, what cheered investors could be the 25% YoY growth in non-Covid revenue and the bounce back of preventive tests, which contributed to 21% of the total sales. Managing Director Om Manchanda said that the bundling of tests, especially in the preventive segment, led to a higher number of tests per patient (2.6 tests per patient). He further added that bundling may lead to lower revenue per test, but the realization per patient rises with the increase in number of tests per patient.

The diagnostic labs space has intense competition with companies across different industries entering the segment. Due to this, a rise in marketing and IT costs led to a 7.8 percentage point YoY fall in EBITDA margin to 23.4% in Q1FY23. Although the management expects the EBITDA margin to go lower in the short term, it expects it to revert back to its pre-Covid level of 25% in FY23.           

  1. Escorts Kubota: This tractor maker’s stock fell nearly 6% on Monday due to its disappointing Q1FY23 results and July wholesales. Its Q1 net profit fell over 20% YoY despite its revenue rising.

Escorts Kubota’s Q1FY23 profit fell due to a four percentage point contraction in its EBITDA margin to 10%. Its market share in the tractors space also declined by over 2% sequentially led by its mainstay markets like Uttar Pradesh and Bihar. In its recent earnings call, the company’s management said the loss of market share was mainly among price sensitive buyers. Escorts hiked prices by 12-13% in the last 18 months and it looks like this led to customers switching to lower end brands. This is probably visible in Escorts Kubota’s July tractor wholesales number falling to 18%. Then there is the uneven distribution of India’s monsoon that may play spoilsport for tractor makers. Although Escorts' management believes that the southwest monsoon will soon catch up, it expects the tractor industry’s growth at just 3-5% YoY in FY23, down from its earlier forecast of 6-8%.

  1. IDBI Bank: This bank’s stock was one of the top gainers on Wednesday as it surged 13% and was trading 3.5X its weekly average trading volumes. It also outperformed the Nifty 500 by 24.4% over the past. The bank’s net profit rose 25% YoY to Rs 756.4 crore because of a fall in provisions while its net interest income fell marginally during the quarter.

The bank’s gross and net NPA ratios in Q1FY23 were 19.9% and 1.2%, respectively, compared to a gross NPA of 22.7% and a net NPA of 1.6% in Q1FY22. The management is positive about the asset quality of the bank and expects NPAs to further decrease. It expects recoveries from insolvency and bankruptcy processes to be close to Rs 4,000 crore in FY23.

There is also the impending stake sale by the Centre in the bank. This has been on the table for a while, and the Centre hopes to conclude the stake sale by FY23. Both Life Insurance Corporation of India and the Centre will sell their stakes as part of the planned strategic stake sale . But any new majority owner in the bank will have to contend with the Reserve Bank of India’s rule that a bank’s promoter must bring down their stake to 26% over a period of time.

  1. Godrej Properties: This real estate developer’s stock had a topsy-turvy week. After the company announced land acquisition in Mumbai on Monday the stock started trading higher. And then came its stellar Q1FY23 results on Tuesday. But the market wasn’t enthused and the company’s stock fell 7% over the next three days.

The company performed well, with a surge in net profit by 2.5X YoY to Rs 140.5 crore, but investors were more focused on another event. The Managing Director and CEO Mohit Malhotra resigned and will leave the company on December 31. The management assured investors that the change in leadership will not hamper business development and that there will be a smooth transition. The management also increased the sales guidance for FY23 to Rs 10,000 crore and declared that the company’s sales may grow 20%. But the stock’s reaction shows investors are still concerned about the change of guard at the top.

  1. Lemon Tree Hotels: This hotel company is in the black after nine consecutive quarters of losses, yet it fell by 3.5% after its Q1FY23 results were announced on Wednesday. The company’s revenue grew more than 4.5X YoY to Rs 192 crore, driven by robust demand from corporate travellers. It posted a net profit of Rs 13.9 crore compared to a loss of Rs 40.1 crore in Q1FY22, despite increasing input costs. It beat Trendlyne Forecaster’s revenue and profit estimates by 14.8% and 51.1%, respectively.

The rise in demand for travel led to the company’s average room rate (ARR) rising to Rs 4,822 in Q1FY23 which was higher than its ARR in the pre-Covid quarter of Q1FY20.  Its EBITDA margin rose by 16 percentage points to 48% compared to 32% in Q1FY20 (pre-Covid). The management said that cost optimization measures led to its margins beating pre-Covid margins. However, the company’s occupancy rate of 65.1% in Q1FY23 was lower than its peers like EIH and Chalet Hotels which had occupancy rates of 72% and 78%, respectively.

As social restrictions began to ease around Q3FY22, demand for travel started to pick up. Since then, the promoters’ pledged shares are down by half since Q3FY22 to 14.7% at the end of Q1FY23. This coincided with Lemon Tree’s stock rising 42.2% over the past seven months.

The management expects the leisure travel and corporate travel segments to continue to gain traction in FY23. They believe customer preference is shifting toward branded hotels, which should bode well for the company.

Trendlyne's analysts identify stocks that are seeing interesting price movement, analyst calls, or new developments. These are not buy recommendations.

Trendlyne Marketwatch    
05 Aug 2022
Market closes flat, Eris Lifesciences Q1 net profit falls 11.3% YoY to Rs 94.5 crore

Trendlyne Analysis

Nifty 50 closed flat, with the volatility index, India VIX, falling below 19%. Reserve Bank of India raised the repo rate by 50 bps to 5.4% during its bi-monthly monetary policy meeting to tackle inflationary pressures. Major European indices traded flat to lower while the Asian indices closed higher than Thursday’s levels. The US indices closed mixed on Thursday as the tech-heavy NASDAQ 100 rose 0.4% and the Dow Jones closed 0.3% lower. US stocks closed mixed as investors await US July jobs report on Friday for cues on the pace of interest rate hikes by the US Federal Reserve. On Thursday, The Bank of England raised the interest rates by 50 bps and warned of a recession in the UK. Crude oil extends losses and traded lower amid demand concerns.

Nifty Smallcap 100 and Nifty Next 50 closed in the green, following the benchmark index. Nifty Realty and Nifty Bank closed higher than Thursday’s levels. Nifty IT closed in the green, tracking the NASDAQ 100, which closed higher on Thursday.

Nifty 50closed at 17,389.05 (7.1, 0.0%), BSE Sensex closed at 58,387.93 (89.1, 0.2%) while the broader Nifty 500closed at 14,889.40 (-3.1, 0.0%)

Market breadth is in the green. Of the 1,893 stocks traded today, 979 were on the uptick, and 848 were down.

  • Krishna Institute of Medical Sciences, Indian Bank, Symphony, and Motilal Oswal Financial Services are trading with higher volumes as compared to Thursday.

  • NMDC sees a long build-up in its August 25 future series as its open interest rises 16.1% with a put-call ratio of 0.82.

  • Alkem Laboratories is falling as its Q1FY23 net profit plunges by 72.7% YoY to Rs 127.6 crore due to a high base from Q1FY22 and price erosion in the US. Revenue falls 5.7% YoY as the sales from the India business and international business decline. EBITDA margin falls by 13.8 percentage points YoY due to high input costs.

  • Auto stocks like Maruti Suzuki India, Tata Motors, Mahindra & Mahindra, Bajaj Auto and Eicher Motors are falling in trade. The broader sectoral index Nifty Auto is also trading in the red.

  • Titan is rising as its Q1FY23 net profit increases 44X to Rs 785 crore. Increase in sales of jewellery and eyecare products aids in a 23.5% YoY growth to Rs 8,975 crore in revenue. The growth in sales of jewellery is driven by buyer demand and ticket sizes.

  • Eris Lifesciences falls after it reports a decline in net profit by 11.3% YoY to Rs 94.5 crore in Q1FY23. Revenue increases 14.1% YoY with Zomelis Mother brand sales improving significantly, and a revival in the cardio-metabolic business. The company maintains revenue guidance of 30% for FY23. Eris' finance costs have surged 9.3X YoY on account of its acquisition of Oaknet Healthcare. The company has declared an interim dividend of Rs 7.35 per share for FY23.

  • Tata Elxsi and Navin Fluorine International hit their 52 week-highs. Tata Elxsi rises for four consecutive days and Navin Fluorine International trades higher for three sessions.

  • Manappuram Finance is rising despite its Q1FY23 net profit falling by 35.4% YoY to Rs 282.1 crore. Profit declines as interest income reduces by 4% YoY, while finance and employee costs increase. However, the company’s assets under management rise 24.3% YoY to Rs 30,760 crore.

  • Mahindra & Mahindra is falling despite reporting a profit of Rs 2,360.7 crore in Q1FY23, against a loss of Rs 331.7 crore in Q1FY22. The company's revenue is up 47.8% YoY to Rs 28,412.4 crore on the back of robust sales volumes for the auto segment.

  • Crompton Greaves Consumer Electricals is trading with more than 16 times its weekly average trading volume. Bayer Cropscience, Blue Star, FDC, and Balkrishna Industries are trading at more than four times their weekly average trading volumes.

  • Steel stocks like JSW Steel, Vedanta, APL Apollo Tubes are rising in trade. The stocks are up after reports that the government is considering reducing or eliminating the export duty on steel products.

  • RBI Governor Shaktikanta Das says that the Indian rupee depreciated systematically and is in a better position than other emerging market currencies. He also adds that RBI will monitor liquidity and focus on stabilizing the rupee.

  • Easy Trip Planners and SpiceJet rise as EaseMyTrip Thai, a subsidiary Easy Trip Planners inks a general sales agreement with SpiceJet to sell, promote and market tickets and services to passengers travelling to Thailand, effective September 1. With this arrangement, both companies are trying to expand their foothold in the Thailand market.

  • HDFC Securities maintains its ‘Buy’ rating on Gujarat Gas but reduces its target price to Rs 575 from Rs 625. This indicates an upside of 24.2%. The brokerage cut its target price due to the company’s sales volume growth being lower than expected. However, the brokerage remains positive on Gujarat Gas' prospects given its rising margins, extensive geographical presence, and higher return ratios compared to its peers. It estimates that its revenue will grow at a CAGR of 22.3% over FY22-24.

  • LIC Housing Finance is rising as its net profit surges 6X YoY to Rs 926.8 crore on the back of robust credit growth and significantly lower provisions. Total disbursements rise by 76% YoY to Rs 15,201 crore. The company’s net interest income has jumped 26% YoY as its net interest margin improves.

  • Welspun Corp is falling as its Q1FY23 net profit drops 95.6% YoY to Rs 4.1 crore. The company's revenue sinks 10.2% YoY amid a rise in raw material and finance costs.

  • Canadian Pension Fund’s arm Ivanhoe Op India Inc sells 70.2 lakh shares (1.46% stake) in Macrotech Developers worth Rs 736 crore in a bulk deal

  • Balkrishna Industries is falling as its net profit declines by 7.1% YoY to Rs 307 crore. Profit falls as raw material costs and logistics costs remain high - freight and forwarding expenses jump by 3X YoY. The management expects a fall in input costs to start from Q4FY23. Revenue rises 45.3% YoY as sales volumes improve on the back of healthy demand. However, the rise in sales volume is offset by elevated input costs leading to the operating margin falling by 11.4 percentage points YoY.

  • Reserve Bank of India raises repo rate by 50 bps to 5.4% during its bi-monthly monetary policy meeting, amid inflationary pressures.

  • Adani Enterprises touches a 52-week high as its Q1FY23 net profit rises 73% YoY to Rs 469.4 crore and revenues surge 3.2X YoY. Maximum revenue came in from integrated resource management, mining and airport segments with revenue from airports zooming 18X YoY. However, a surge in foreign exchange expenses because of a volatile rupee along with an increase in employee benefit expense, finance costs and operating expenses dent the operating margin by 6.1 percentage points to 2.7%.

  • Britannia’s Q1FY23 net profit falls 13% YoY to Rs 337.4 crore despite an increase in revenue by 9%. The company’s sales volumes are also down but may increase from Q2FY23. Despite the company increasing prices across a range of its products, the operating margin of the company fell 269 bps YoY because of an increase in input costs due to inflation. The management expects a fall in commodity prices and additional price hikes to improve profitability in the coming quarters.

Riding High:

Largecap and midcap gainers today include Oil India Ltd. (197.80, 5.24%), Tata Communications Ltd. (1,101.35, 4.79%) and InterGlobe Aviation Ltd. (2,080.90, 4.77%).

Downers:

Largecap and midcap losers today include Balkrishna Industries Ltd. (2,162.80, -6.77%), Adani Transmission Ltd. (3,313.55, -6.14%) and Zomato Ltd. (54.60, -5.62%).

Volume Rockets

32 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Manappuram Finance Ltd. (108.15, 6.39%), Lemon Tree Hotels Ltd. (72.85, 6.27%) and FDC Ltd. (272.55, 5.80%).

Top high volume losers on BSE were Balkrishna Industries Ltd. (2,162.80, -6.77%), GAIL (India) Ltd. (132.90, -5.14%) and Amber Enterprises India Ltd. (2,268.00, -4.81%).

Crompton Greaves Consumer Electricals Ltd. (373.85, -3.86%) was trading at 17.6 times of weekly average. Bayer Cropscience Ltd. (5,482.05, 3.69%) and NMDC Ltd. (110.90, 3.26%) were trading with volumes 17.0 and 12.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

14 stocks took off, crossing 52-week highs, while 1 stock was an underachiever and hit its 52-week lows.

Stocks touching their year highs included - Adani Transmission Ltd. (3,313.55, -6.14%), Cholamandalam Investment & Finance Company Ltd. (771.20, 1.07%) and Deepak Fertilisers & Petrochemicals Corporation Ltd. (809.80, -3.55%).

Stock making new 52 weeks lows included - Alembic Pharmaceuticals Ltd. (672.65, -4.31%).

20 stocks climbed above their 200 day SMA including Redington (India) Ltd. (144.80, 3.76%) and Restaurant Brands Asia Ltd. (125.10, 3.69%). 16 stocks slipped below their 200 SMA including Balkrishna Industries Ltd. (2,162.80, -6.77%) and Garware Technical Fibres Ltd. (3,020.25, -6.49%).

Trendlyne Marketwatch    
04 Aug 2022
Market closes flat, PI Industries’ Q1 profit increases 40.2% YoY

Trendlyne Analysis

Nifty 50 closed flat after gyrating between losses and gains on a volatile day of trade. European stocks traded marginally higher as investors await the Bank of England's monetary policy committee meeting scheduled later today. Most major Asian indices closed in the green, tracking the US indices, which closed sharply higher on Wednesday. However, Taiwanese stocks closed lower as China began military drills around Taiwan after US House Speaker Nancy Pelosi’s visit. US stocks rose on Wednesday on the back of decent economic data and strong corporate earnings. The tech-heavy index, NASDAQ 100, rose 2.7% while the Dow Jones closed 1.3% higher. Brent crude oil futures traded higher after closing at a multi-month low on Wednesday due to demand concerns.

Nifty Next 50 closed higher, despite the benchmark index closing flat. Nifty Metal and Nifty Pharma closed higher than Wednesday’s levels. Nifty IT closed in the green, tracking the NASDAQ 100, which rose 2.7% on Wednesday.

Nifty 50closed at 17,364.00 (-24.2, -0.1%), BSE Sensexclosed at 58,298.80 (-51.7, -0.1%) while the broader Nifty 500closed at 14,879.20 (1.2, 0.0%)

Market breadth is in the red. Of the 1,889 stocks traded today, 814 were in the positive territory and 1,025 were negative.

  • EPL, Mahindra Logistics, Aptus Value Housing Finance India, and Ajanta Pharmaare trading with higher volumesas compared to Tuesday.

  • Lupin sees a long build-up in its August 25 future series as its open interest rises 19.2% with a put-call ratio of 1.32.

  • KR Choksey initiates its coverage on Ashok Leyland with an ‘accumulate’ rating with a target price of Rs 168. This indicates an upside of 13.3%. As the commodity costs are falling, the brokerage expects the company’s profitability to improve due to higher gross margins. Higher volumes could enable operating leverage, which could also boost profits. The brokerage estimates Ashok Leyland’s revenue CAGR of 32.4% over FY22-24.

  • Energy stocks like Reliance Industries, Adani Transmission, Adani Green Energy, Oil and Natural Gas Corp, among others, are falling in trade. The broader sectoral index Nifty Energy is also trading in the red.

  • Stocks like Adani Transmission, Metro Brands, Adani Enterprises, and Asian Paintsare in the overbought zone, according to the technical indicator relative strength index or RSI.

  • Public sector banks like State Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, Bank of India, among others, are falling in trade. The broader sectoral index Nifty PSU Bank is also trading in the red.

  • Indian rupee depreciates 66 paise to Rs 79.82 against the dollar in trade today on speculation of a 50 bps rate hike by US Feds. The rupee hit a record low of Rs 80.06 on July 21.

  • Tiger Global Fund’s Internet Fund VI Pte cuts its stake in Zomato to 2.7% from 5.1% between July 25 and August 2.

  • Mahindra & Mahindra and Eicher Motors hit their 52-week highs of Rs 1,265 and Rs 3,196.5, respectively. While Mahindra & Mahindra trades higher for nine consecutive days, Eicher Motors rises for four sessions.

  • Macrotech Developers is trading with more than 33 times its weekly average trading volume. Kalyan Jewellers India, HLE Glasscoat, Tata Consumer Products, and Lupinare trading at more than eight times their weekly average trading volumes.

  • HDFC Bank issues clarification on reports of fundraising, to pay off the liability arising from the merger of HDFC. The bank says that the liabilities of HDFC Limited will be transferred to the Bank post merger.
  • IEX is falling as its July power trading volume decreases 1.7% YoY to 7,151 million units. According to the data given by National Load Dispatch Center, energy consumption was also down 2.3% YoY in July. Peak demand fell because of a good monsoon in the last two months.

  • PI Industries is rising as its Q1FY23 net profit increases 40.2% YoY to Rs 262.4 crore. A 42% YoY rise in exports helps its revenue rise 29.2% YoY to Rs 1,543.2 crore. Price hikes in the domestic business and a favourable product mix helps its domestic revenue rise during the quarter.

  • Uber sells 61.2 crore shares of Zomato worth Rs 3,087.9 crore in a bulk deal on Wednesday. Fidelity Investment buys 5.4 crore shares in Zomato worth Rs 273.6 crore and ICICI Prudential Life Insurance buys 4.5 crore shares in the company worth Rs 226.1 crore in a bulk deal.

  • Lupin is rising despite the company posting a net loss for the second consecutive quarter of Rs 89.1 crore in Q1FY23. A fall in net sales by 14.9% YoY and a rise in raw materials expenses, employee benefits expenses and finance costs result in a fall in EBITDA margin by 16.8 percentage points YoY. The management says that the company continues to face price erosion in its US business and inflation in raw materials, however, the India business continues to grow ahead of the market.

  • Metal stocks like APL Apollo Tubes, Hindalco Industries, Jindal Steel & Power, and NMDC, among others, are rising in trade. The broader sectoral index Nifty Metal is also trading in green.

  • Retail sales for the automotive industry are down in July as total retail sales fall 8% YoY to 14.4 lakh units, according to data from the Federation of Automotive Dealers' Association. Two-wheeler retail sales fall 10.92% YoY to 10 lakh units. Retail sales of car makers also fall slightly by 4.7% YoY to 2.5 lakh units. Three-wheeler and commercial vehicle retail sales grow by 80% and 27% YoY respectively.

  • Hindalco rises as its subsidiary Novelis reports an increase in revenue by 32% YoY to % $5.1 billion. But its net profit increases only 1.3% YoY in Q1FY23. According to reports, brokerage JP Morgan maintains its 'Overweight' stance on the stock despite its profit rising only marginally. Shipments in the North American market increase on strong demand for can and automotive equipment as semi-conductor supplies improve. However, shipments in the European, Asian and South American markets decline because of inflationary cost pressures.

  • All IT stocks are trading in the green. Stocks like Infosys, MindTree, Mphasis and L&T Technology Services are up by more than 2%. The broader sectoral index Nifty IT is also rising in trade.

  • Vodafone Idea is falling as its net loss widens in Q1FY23 to Rs 7,296.7 crore against Rs 6,563 crore in Q4FY22. However, revenue from services increases marginally by 1.7% QoQ as the average revenue per user rises 3.2% QoQ. The company’s finance costs and network expenses also rise more than 11% QoQ. Its total gross debt stands at Rs 1.9 lakh crore in Q1FY23.

  • InterGlobe Aviation’s Q1FY23 loss narrows to Rs 1,064.3 crore as compared to Rs 3,174.2 crore in Q1FY22. Revenue surges 4.3X YoY as flight operations pick up pace post-Covid restrictions. However, aircraft fuel expenses jump nearly 5X YoY because of an increase in aviation turbine fuel prices. Airport fees and charges surge 2.3X YoY. The management plans to increase operational capacity by 70%-80% and says that with high revenue growth and controlled fuel costs the airline may become profitable by Q2FY23.

Riding High:

Largecap and midcap gainers today include Varun Beverages Ltd. (1,003.75, 6.49%), Zydus Lifesciences Ltd. (364.60, 5.24%) and Lupin Ltd. (659.95, 5.15%).

Downers:

Largecap and midcap losers today include Macrotech Developers Ltd. (1,037.25, -6.12%), Gujarat Gas Ltd. (444.45, -3.98%) and Vodafone Idea Ltd. (8.75, -3.85%).

Volume Shockers

22 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included HLE Glasscoat Ltd. (3,495.05, 12.13%), Redington (India) Ltd. (139.55, 9.11%) and Rashtriya Chemicals & Fertilizers Ltd. (94.05, 7.49%).

Top high volume losers on BSE were Macrotech Developers Ltd. (1,037.25, -6.12%), Gujarat Gas Ltd. (444.45, -3.98%) and Cera Sanitaryware Ltd. (4,700.60, -3.65%).

Kalyan Jewellers India Ltd. (70.30, 5.71%) was trading at 19.6 times of weekly average. Lupin Ltd. (659.95, 5.15%) and Tata Consumer Products Ltd. (789.25, -2.89%) were trading with volumes 12.8 and 12.0 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

20 stocks made 52-week highs, while 2 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - Adani Power Ltd. (347.25, 2.25%), Adani Transmission Ltd. (3,530.45, 0.72%) and Blue Dart Express Ltd. (8,866.70, -0.96%).

Stocks making new 52 weeks lows included - GlaxoSmithKline Pharmaceuticals Ltd. (1,395.65, 0.94%) and Zensar Technologies Ltd. (246.70, -1.28%).

12 stocks climbed above their 200 day SMA including Ipca Laboratories Ltd. (1,024.95, 4.81%) and Au Small Finance Bank Ltd. (636.60, 4.43%). 20 stocks slipped below their 200 SMA including Angel One Ltd. (1,253.20, -4.56%) and Balrampur Chini Mills Ltd. (364.50, -4.05%).

Trendlyne Marketwatch    
03 Aug 2022
Market closes higher, eClerx Services' board mulls a bonus issue of shares

Trendlyne Analysis

Nifty 50 recovered over 160 points from its day’s low and closed in the green on a volatile day of trade. Indian indices closed higher for a sixth straight session. India’s July Services Purchasing Managers' Index or PMI missed analysts’ forecast and fell to 55.5 from 59.2 in June. European indices traded lower than Tuesday’s levels.

Major Asian indices closed mixed as investors keep an eye on the China-US tensions as US House Speaker Nancy Pelosi landed in Taiwan on Tuesday, despite warnings from China. In reaction, China said the action was “extremely dangerous” by the US. On Tuesday, US indices closed in the red, led by the Dow Jones, which fell 1.2%. The tech-heavy index, NASDAQ 100, closed 0.3% lower while the S&P 500 fell 0.7%. Brent crude oil futures hovered around $100 levels after falling over 7% in the last three days due to demand concerns.

Nifty Smallcap 100 and Nifty Midcap 100 closed in the red, despite the benchmark index closing in the green. Nifty Realty and Nifty Pharma closed lower than Tuesday’s levels. Nifty IT closed in the green, despite the tech-focused index, NASDAQ 100, closing lower on Tuesday.

Nifty 50closed at 17,392.90 (47.5, 0.3%), BSE Sensexclosed at 58,350.53 (214.2, 0.4%) while the broader Nifty 500closed at 14,880.00 (3.4, 0.0%)

Market breadth is moving down. Of the 1,895 stocks traded today, 614 were gainers and 1,233 were losers.

  • Gland Pharma, Endurance Technologies, V-Guard Industries, and Sun Pharma Advanced Research Companyare trading with higher volumes as compared to Tuesday.

  • Cipla sees a long build-up in its August 25 future series as its open interest rises 1.9% with a put-call ratio of 0.7.

  • Indian rupee appreciates to 78.7 against the US dollar in early trade today, but gives up its gains and falls for the first time in five days.

  • eClerx Services is surging in trade after announcing that its board of directors will mull a bonus issue of shares on Tuesday. The board will also approve the company's Q1FY23 results on the same day.

  • Auto stocks like Bosch, Bharat Forge, Tata Motors and Maruti Suzuki India, among others, are falling in trade. The broader sectoral index Nifty Auto is also trading in red.

  • City gas distributor Mahanagar Gas announces a second price hike within a month. It hikes prices for CNG by Rs 6 per kg and PNG by Rs 4 per unit with immediate effect.

  • Sun Pharma's Chairman Israel Makov will retire on August 29 after the completion of his tenure. He will also step down from the company's board of directors.

  • ICICI Direct maintains its ‘Buy’ rating on Ashok Leyland with a target price of Rs 180, indicating an upside of 17%. The brokerage expects the company to be the largest beneficiary of the cyclical recovery in the commercial vehicle space given its large market share and extensive product portfolio. It also believes the company’s sales volume growth and cost control measures will increase profitability in the coming quarters. The brokerage estimates the company’s net profit to grow at a CAGR of 60.8% over FY22-24.

  • SpiceJet rises as the airline’s promoter Ajay Singh looks at the option of a partial stake sale, according to reports. This could include a 24% stake sale to an investor, which could include a seat on the company's board. Ajay Singh holds a 60% stake in SpiceJet, as of June 30.

  • MOIL is trading with more than 30 times its weekly average trading volume. eClerx Services, The New India Assurance Company, General Insurance Corporation of India, and Brigade Enterprises are trading at more than ten times their weekly average trading volumes.

  • Zomato is falling in trade as reports suggest Uber sells its 7.8% stake in the company worth Rs 3,087 crore.
  • Telecommunication companies like Indus Towers, Vodafone idea, Tejas Networks, Tata Teleservices, and Sterlite Technologies are falling in trade. The broader sectoral index S&P BSE Telecom is also trading in the red.

  • Bosch is falling despite its Q1FY23 net profit rising 28.3% YoY to Rs 334.1 crore. Rise in sales of automotive products helps the revenue to increase 45% YoY to Rs 3,544.4 crore. Original equipment manufacturers’ (OEM) long waiting periods for delivery and strong order books aids in the rise in revenue of automotive products. This gives the company sustained demand in the passenger cars and utility vehicles segments.

  • Lemon Tree Hotels is falling despite turning profitable in Q1FY23, after posting a loss for nine consecutive quarters. The company posts a net profit of Rs 13.9 crore in Q1FY23 as compared to a loss of Rs 40.1 crore in Q1FY22. Revenue grows 4.5X YoY mainly due to a significant rise in corporate travel. The company’s occupancy rate rises 35.5 percentage points YoY to 65.1% as demand from the corporate travel and leisure travel segment improves.

  • India’s July Services Purchasing Managers' Index (PMI) falls to 55.5 compared to 59.2 in June due to inflationary pressures.

  • Nomura Singapore buys 11.5 lakh shares (0.5% stake) in Easy Trip Planners at an average price of Rs 399 per share in a bulk deal on Tuesday.

  • Rakesh Jhunjhunwala buys 0.9% stake in Leading Leasing Finance and Investment worth Rs 73.5 lakh in a bulk deal on Monday.

  • The Centre cut export taxes on diesel to Rs 5 per litre from Rs 11 per litre on Tuesday. This comes after India’s trade deficit hit a record high in July. The Centre also raises export tax on domestically produced crude oil to Rs 17,750 per tonne from Rs 17,000 per tonne.

  • Mahindra & Mahindra Financial Services’ disbursements in July grows 63% YoY to Rs 3,912 crore on the back of an improving macro environment. The company’s asset quality improves as its collection efficiency rises 200 bps YoY to 97%. The management expects the asset quality to improve further in Q2FY23.

  • Subex – a Telecom Analytics Solutions company ties up with Jio Platforms to provide artificial intelligence (AI) for Jio’s 5G product line. With this, Jio Platforms will give its Cloud Native 5G core to telecom companies globally, combining it with Subex’s AI for network automation, better performance and customer experience.

  • Siemens’ Q1FY23 net profit surges 2.2X YoY to Rs 300.7 crore in Q1FY23 as revenue jumps 50.5% YoY. Revenue rises across segments, with energy increasing 52.3% and smart infrastructure rising 40.5% YoY. Revenue from mobility and digital industries also grew by 171% and 45.7%, respectively. The management attributes revenue growth to a robust order book. However, it is also concerned about the global demand scenario and may slowdown capex in case of a slowdown.

Riding High:

Largecap and midcap gainers today include IDBI Bank Ltd. (41.25, 13.32%), The New India Assurance Company Ltd. (89.50, 6.67%) and One97 Communications Ltd. (804.55, 6.46%).

Downers:

Largecap and midcap losers today include Indus Towers Ltd. (206.45, -5.88%), Siemens Ltd. (2,614.65, -4.46%) and YES Bank Ltd. (16.45, -4.08%).

Volume Shockers

24 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included IDBI Bank Ltd. (41.25, 13.32%), Spicejet Ltd. (50.10, 12.97%) and The New India Assurance Company Ltd. (89.50, 6.67%).

Top high volume losers on BSE were Indus Towers Ltd. (206.45, -5.88%), Siemens Ltd. (2,614.65, -4.46%) and Thermax Ltd. (2,010.40, -3.90%).

Johnson Controls-Hitachi Air Conditioning India Ltd. (1,534.80, -2.19%) was trading at 42.5 times of weekly average. MOIL Ltd. (166.50, 4.91%) and eClerx Services Ltd. (2290.50, 4.29%) were trading with volumes 37.6 and 25.8 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

14 stocks overperformed with 52-week highs, while 1 stock tanked below its 52-week lows.

Stocks touching their year highs included - Adani Power Ltd. (339.60, 3.36%), Adani Transmission Ltd. (3,505.35, 2.45%) and AIA Engineering Ltd. (2,489.75, -0.22%).

Stock making new 52 weeks lows included - GlaxoSmithKline Pharmaceuticals Ltd. (1,382.60, -2.31%).

15 stocks climbed above their 200 day SMA including Star Cement Ltd. (93.70, 5.52%) and MOIL Ltd. (166.50, 4.91%). 21 stocks slipped below their 200 SMA including Balrampur Chini Mills Ltd. (379.90, -5.21%) and Alkyl Amines Chemicals Ltd. (3,036.40, -3.27%).

The Baseline    
03 Aug 2022
Chart of the week: European customers are paying much more for petrol, compared to India
By Abdullah Shah

With energy demand rising  to pre-covid levels since March 2022, and the Ukraine-Russia war leading to sanctions on Russian crude oil exports, motor fuel prices are going through the roof.

Although pump prices in India are elevated with the average price of petrol hovering over Rs 100, Indians aren’t really the worst affected. European countries are worse off - the United Kingdom’s pump prices for petrol (in rupee terms) are among the highest in the world at Rs 178.9/litre, as of July 25. 

The UK’s high pump prices are also a function of the shortage in fuel supply due to environmentalist groups blocking supply of fuel, which resulted in long queues at petrol pumps. This was compounded by the recent depreciation of the pound sterling against the US dollar.

Petrol prices in France and Germany are the second and third highest with petrol prices at Rs 150.8/litre and Rs 141.3/litre, respectively. In rupee terms, India, China and Japan’s petrol prices are lower than European countries. 

China has a marginally higher pump price at Rs 111/litre as compared to India’s average of Rs 104/litre. Japan’s petrol price is lower than India's at Rs 96.8/litre.

With many Indian states and the Centre cutting sales and excise taxes on motor fuel, Indian petrol prices have been lower than global averages.. India’s fuel prices haven’t changed since April 7

Trendlyne Marketwatch    
02 Aug 2022
Market closes flat, Godrej Properties' Q1 profit up 168% YoY

Trendlyne Analysis

Nifty 50 closed flat, with the volatility index, India VIX, rising over 18.5%. European indices followed the global trend and traded lower than Monday’s levels. Major Asian indices closed in the red, led by the Chinese and Taiwanese stocks ahead of a possible visit by US House Speaker Nancy Pelosi to Taiwan, despite warnings from China. The White House national security spokesman John Kirby said that China may respond to Nancy Pelosi’s visit with military provocations. The US indices closed flat to lower on Monday. The tech-heavy index, NASDAQ 100, closed flat while the S&P 500 fell 0.3%. Brent crude oil futures, which lost about 7% in the last two trading sessions, traded lower over demand concerns.

Nifty Smallcap 100 and Nifty Midcap 100 closed higher, despite the benchmark index closing flat. Nifty Realty and Nifty Metal closed lower than Monday’s levels. Nifty IT closed in the red, taking cues from NASDAQ 100 futures, which is trading lower.

Nifty 50 closed at 17,294.85 (-45.2, -0.3%) , BSE Sensex closed at 58,136.36 (20.9, 0.0%) while the broader Nifty 500 closed at 14,836.60 (-10.3, -0.1%)

Market breadth is in the green. Of the 1,891 stocks traded today, 1,026 were on the uptrend, and 818 went down.

  • Medplus Health Services, Chalet Hotels, Cholamandalam Financial Holdings, and Infosysare trading with higher volumes as compared to Monday.

  • State Bank of India sees a long build-up in its August 25 future series as its open interest rises 7.1% with put to call ratio of 0.66.

  • Centre’s Ministry of Power eases the 10% mandatory coal import norms for blending purposes.
  • Adani Ports & Special Economic Zone’s cargo volumes in July rises 13% YoY to 31.23 million metric tonnes (MMT). From April 2022 to July 2022, the company handled 122.12 MMT of cargo, indicating a growth of 9% YoY.

  • All Public sector banks are trading in the green. Stocks like Bank of Baroda, Canara Bank, Punjab National Bank, Bank of India, among others are up by more than 3%. The broader sectoral index Nifty PSU Bank is also rising in trade.

  • Godrej Properties' Managing Director and Chief Executive Officer Mohit Malhotra resigns on Tuesday. His resignation is effective from December 31.

  • Utility stocks like Adani Transmission, JSW Energy, PTC India, and Reliance Power, among others, are rising in trade. The broader sectoral index S&P BSE Utilities is also trading in green.

  • HDFC Securities initiates coverage on Star Health and Allied Insurance with a ‘Buy’ rating and a target price of Rs 860. This indicates an upside of 15.1%. The brokerage is positive on the prospects of the company given its extensive distribution network, high customer stickiness, and large market share. It expects the company’s net profit to grow 82.7% in FY24 over FY23.

  • YES Bank rises in trade as HDFC Bank’s ex-MD Aditya Puri may get a seat on the bank's board, on behalf of PE Firm Carlyle, according to reports.

  • Godrej Properties is falling despite an increase in net profit by 168% YoY to Rs 45.5 crore in Q1FY23. The company’s revenue also rises 2.8X YoY as booking value surges (407%). However, the cost of raw materials shoots up 6X YoY because of high inflation.

  • Kansai Nerolac Paints is trading with more than 21 times its weekly average trading volume. Indigo Paints, Triveni Turbine, Venky's (India), and Lux Industries are trading at more than six times their weekly average trading volumes.

  • Castrol India is rising as its Q1FY23 net profit rises 47.3% YoY to Rs 206.3 crore. Profit grows as the company hikes prices to offset rising input costs. Revenue grows 39.6% YoY as sales volume improves. Price hikes and sales volume growth aid in margin expansion amid high input costs. Operating margin rises 84 bps YoY to 23%.

  • NielsenIQ says that India's FMCG industry has grown 10.9% in the June quarter for Q2 CY22. Urban markets contribute to positive volume growth compared to the rural markets. NielsenIQ's forecast indicates a 8-10% growth for this year.

  • Paint stocks like Kansai Nerolac Paints, Asian Paints, Indigo Paints among others rise as crude oil prices fall for the second consecutive session.

  • NMDC is falling as its July iron ore production declines 33% YoY to 2.05 million tonnes. Total production declines as iron ore production in Chhattisgarh drops 46% YoY. The company’s monthly sales also fall by 10% YoY to 2.95 million tonnes, mainly due to a 40.2% YoY decline in sales from its operations in Chhattisgarh.

  • Finance Minister Nirmala Sitharaman says there are no fears of recession or stagflation for the Indian economy, during the ongoing Parliament session, on Monday. She says the Centre is focused on curbing inflation.

  • Hero MotoCorp is falling as its total two-wheeler wholesales for July 2022 drops 1.9% YoY to 4.4 lakh units. Both motorcycle and scooter wholesales fell by 0.7% YoY and 19.7% YoY, respectively, which resulted in its July 2022 wholesales being lower than July 2021.

  • SpiceJet rises as it settles its outstanding principal dues with the Airport Authority of India (AAI). AAI will soon release a Rs 50-crore bank guarantee which will provide additional liquidity for the company. With this, the airline will now be paying in advance to AAI, instead of a ‘cash and carry’ process, for its daily flight operations.

  • Ashish Kacholia buys a 2.8% stake in Agarwal Industrial Corp worth Rs 18.8 crore and sells a 1.8% stake in Mastek worth Rs 116.1 crore on Monday, in bulk deals.

  • Zomato is rising despite reporting a loss of Rs 185.7 crore in Q1FY23. However, the company’s loss reduces on a YoY basis from Rs 356.2 crore last year. Even as revenue rises 67.4% YoY, a nearly 2X YoY surge in delivery charges dents the company’s margins. Revenue grows as the company’s gross order value rises 41.6% YoY driven by growth in order volumes and average order value.

  • UPL falls despite its Q1FY23 net profit rising 29.5% YoY to Rs 877 crore. Profits rose because of higher sales volumes and a favourable exchange rate. Revenue is up 27% with revenues from both agro and non-agro segments rising. However, raw material costs also increase 26% YoY affecting operating margins marginally, as it rises 3 bps YoY. The management expects demand to improve in the coming quarters. The company revises its FY23 revenue guidance to 12%-15%.

  • Metal stocks like Tata Steel, Steel Authority of India (SAIL), Jindal Steel & Power among others, are falling in trade. The broader Nifty Metal is also trading in the red.

  • ITC’s Q1FY23 net profit rises 34% YoY to Rs 4,389.7 crore as revenue increases 38.9%. Revenue grew across all segments with revenue from its cigarette segment growing 28.6% YoY and revenue from agri-business rising 82%. Revenue from agri-business grew because of an increase in wheat, rice and tobacco leaf exports. Hotel (334%) and paper and packaging segments (43.3%) also see decent growth. Demand for paper rose despite commodity prices rising as educational institutions open and Covid restrictions wane.

Riding High:

Largecap and midcap gainers today include Zomato Ltd. (55.55, 19.98%), Kansai Nerolac Paints Ltd. (508.30, 17.78%) and YES Bank Ltd. (17.15, 12.46%).

Downers:

Largecap and midcap losers today include GAIL (India) Ltd. (141.50, -3.94%), Indus Towers Ltd. (219.35, -3.67%) and UPL Ltd. (739.60, -3.62%).

Movers and Shakers

41 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Kansai Nerolac Paints Ltd. (508.30, 17.78%), YES Bank Ltd. (17.15, 12.46%) and Indigo Paints Ltd. (1,549.45, 10.07%).

Top high volume losers on BSE were Escorts Kubota Ltd. (1,633.45, -5.20%), Godrej Properties Ltd. (1,464.10, -3.18%) and Jubilant Pharmova Ltd. (361.00, -2.89%).

Triveni Turbine Ltd. (192.95, 6.63%) was trading at 13.5 times of weekly average. Star Cement Ltd. (88.80, 1.08%) and Lux Industries Ltd. (1,965.85, 6.83%) were trading with volumes 12.5 and 10.5 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

29 stocks hit their 52 week highs,

Stocks touching their year highs included - Adani Transmission Ltd. (3,421.45, 4.90%), AIA Engineering Ltd. (2,495.35, 0.84%) and Bank of Baroda (121.75, 4.69%).

32 stocks climbed above their 200 day SMA including Kansai Nerolac Paints Ltd. (508.30, 17.78%) and IRB Infrastructure Developers Ltd. (234.95, 7.70%). 11 stocks slipped below their 200 SMA including Escorts Kubota Ltd. (1,633.45, -5.20%) and Anupam Rasayan India Ltd. (795.55, -5.04%).

Trendlyne Marketwatch    
01 Aug 2022
Market closes higher, Maruti Suzuki's domestic passenger vehicle wholesales rise 6.8% YoY

Trendlyne Analysis

Nifty 50 closed in the green, with the volatility index, India VIX, rising significantly. Indian indices closed higher for a fourth straight session. GST collection rises 28% YoY in July to Rs 1.49 lakh crore. Centre GST revenue stands at Rs 25,751 crore, State GST is at Rs 32,807 crore and Integrated GST is at Rs 79,518 crore. India's manufacturing purchasing managers' Index (PMI) rises to an eight-month high of 56.4 in July compared to 53.9 in June.

European indices traded higher than Friday’s levels. Asian indices trade mixed as China’s PMI fell to 49 in July from 50.2 in June. US indices closed higher on Friday led by the tech-heavy index, NASDAQ 100, which rose 1.8%. The Dow Jones closed 1% higher while the S&P 500 rose 1.4%. Crude oil futures traded lower on the back of weak Chinese PMI data ahead of a crucial OPEC+ meeting scheduled on Wednesday.

Nifty Smallcap 100 and Nifty Next 50 closed higher, following the benchmark index. Nifty Auto and Nifty Energy closed sharply higher than Friday’s levels. Nifty IT closed in the green, taking cues from the NASDAQ 100, which closed sharply higher on Friday.

Nifty 50 closed at 17,332.30 (174.1, 1.0%) , BSE Sensex closed at 58,115.50 (545.3, 1.0%) while the broader Nifty 500 closed at 14,842.15 (176.5, 1.2%)

Market breadth is surging up. Of the 1,926 stocks traded today, 1,346 were in the positive territory and 520 were negative.

  • IIFL Wealth Management, EPL, Sanofi India, and CESC are trading with higher volumes as compared to Friday.

  • Tata Steel sees a long build-up in its August 25 future series as its open interest rises 8% with put to call ratio of 0.46.

  • Maruti Suzuki is rising as its domestic passenger vehicle wholesales increase by 6.8% YoY to 1.4 lakh units. Increase in wholesales of mini, compact and mid-sized passenger cars by 16.9% YoY aids the rise in domestic wholesales of passenger vehicles.

  • Mahindra & Mahindra is rising as its July monthly overall auto wholesales rise 30.6% YoY to 56,148 units. The growth in auto wholesales is driven by a rise in domestic wholesales of utility vehicles and commercial vehicles by 34% YoY and 18.6% YoY, respectively. However, farm equipment wholesales fall 14% YoY to 21,684 units as domestic farm equipment wholesales decline 16% YoY. Domestic farm equipment wholesales fall as July marks the beginning of the sowing season.

  • Media stocks like Zee Entertainment Enterprises, PVR, Saregama India, Inox Leisure, Network 18 Media & Investments, among others, are rising in trade. The broader sectoral index Nifty Media is also trading in the green.

  • Ashok Leyland rises to a three-year high of Rs 158.2 as its commercial vehicle wholesales increase 58% YoY to 13,625 units. The rise in commercial vehicle wholesales is due to a 113% rise in wholesales of medium and heavy commercial vehicles.

  • Edelweiss maintains its ‘Buy’ rating on Zydus Wellness with a target price of Rs 2,271. This indicates an upside of 41%. The brokerage expects the company’s growing product portfolio to drive profitability in FY23. It remains positive on the company’s prospects on the back of new product launches, expansion in distribution reach, high advertising & promotion expenditure, and price hikes. The brokerage estimates the company’s net profit to grow at a 23.2% CAGR over FY22-24.

  • Bajaj Auto is rising despite its July two-wheeler wholesales falling 5% YoY to 3.2 lakh units. The drop in two-wheeler wholesales comes due to a 14% YoY fall in exports. However, the company's commercial vehicle wholesales rise 3% YoY.

  • Godfrey Phillips India is trading with more than 10 times its weekly average trading volume. Nazara Technologies,Metro Brands,Mastek, and IDFC First Bank are trading at more than seven times their weekly average trading volumes.

  • India's digital payments platform-Unified Payments Interface (UPI) processes transactions worth Rs 10.6 lakh crore, a record high since its launch in 2016. Value of transactions rise 75% YoY.

  • Tata Motors’ total domestic wholesales rise 52% YoY with commercial vehicle wholesales increasing 43% YoY. As the economy picks up pace, passenger carrier vehicles’ wholesales rise 319% YoY. Despite semi-conductor shortages, domestic passenger vehicle wholesales are up 57% in July.

  • Escorts Kubota is falling as its monthly tractor wholesales in July are down by 18.3% YoY to 5,360 units. The decline in tractor wholesales is due to a 22.3% YoY fall in domestic tractor wholesales. The company's construction equipment monthly wholesales declines by 17.7% YoY.

  • Bank of Baroda is rising as its net profit rises 79.4% YoY to Rs 2,168 crore due to a 39% YoY fall in provision for bad loans. Net interest income rises 12% YoY on the back of its overall gross advances growing to Rs 8.4 lakh crore. Credit growth is led by the expansion of the bank's retail loan portfolio, driven by personal loans, auto loans and educational loans. The bank’s asset quality improves significantly as its net NPA ratio falls 145 bps YoY to 1.6%.

  • Indian Oil Corp falls as it posts a loss of Rs 279.4 crore at the consolidated level in Q1FY23, the first time in eight quarters. Revenue rises 63.2% YoY to Rs 2.5 lakh crore. The company’s net profit falls despite gross refining margin (GRM) rising 383.4% YoY to $ 31.8 per barrel.

  • Metropolis Healthcare’s Chief Executive Officer Vijender Singh resigns on Friday due to personal reasons. The resignation is effective from November 30.

  • India’s Manufacturing Purchasing Managers' Index (PMI) rises to 56.4 in July compared to 53.9 in June.

  • DLF is falling despite its net profit rising 39.3% YoY to Rs 469.6 crore. Profit grows on robust demand in the super luxury category of residential homes. Revenue rises by 26.5% YoY on the back of new product launches. New sales booking in the residential business jumps 2X YoY to Rs 2,040 crore. The company generates surplus cash of Rs 421 crore, which aided in reducing its net debt to Rs 2,259 crore. However, the company’s operating margin falls by 6 percentage points YoY as the cost of land, plots, and constructed properties rises 26.7% YoY.

  • Airline stocks like InterGlobe Aviation (Indigo) and Spicejet are rising in trade after jet fuel prices go down by 12% amid a fall in international crude oil prices.

  • Metro Brands rises and hits an all-time high as it reports a net profit of Rs 105.7 crore in Q1FY23 against a net loss of Rs 12 crore in Q1FY22. Revenue shoots up 3.8X YoY as sales increase across product categories and regions with digital sales growing 106% YoY. Gross margin improves by 40 bps to 59.7% because of better sales mix and minimal contribution of discounted sales. The company also adds 20 more stores in Q1FY23.

  • NTPC is falling despite its Q1FY23 net profit rising 16.9% YoY to Rs 3,676.4 crore. Its revenue surges 47% YoY with revenue from power generation growing 47.7%. However, its expenses shoot up with fuel costs rising 76.5% YoY because of rise in crude oil prices. This affected operating margin as it fell 5.6 percentage points to 17.5%

  • Cipla’s Q1FY23 net profit falls 4% YoY to Rs 686 crore as revenue dips 2.8% YoY. The management says margins are within its guidance (21.3%) because of a steady increase in prices which offset the rise in costs. Revenue from pharma segment is down 3% YoY. The company’s India revenue also falls 8.4% YoY to Rs 2,483 crore because of normalization in share of Covid-19 drugs.

Riding High:

Largecap and midcap gainers today include IDFC First Bank Ltd. (41.95, 11.72%), Kansai Nerolac Paints Ltd. (431.55, 7.89%) and PB Fintech Ltd. (504.20, 7.68%).

Downers:

Largecap and midcap losers today include Star Health and Allied Insurance Company Ltd. (709.75, -5.01%), Tube Investments of India Ltd. (2,023.00, -2.83%) and Sun Pharmaceutical Industries Ltd. (918.70, -2.60%).

Volume Shockers

42 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included Metro Brands Ltd. (737.20, 15.23%), V Mart Retail Ltd. (3,123.55, 12.69%) and IDFC First Bank Ltd. (41.95, 11.72%).

Top high volume losers on BSE were Multi Commodity Exchange of India Ltd. (1,322.60, -5.32%), Blue Star Ltd. (960.75, -2.49%) and Emami Ltd. (444.75, -1.13%).

Punjab & Sind Bank (14.90, -0.33%) was trading at 16.2 times of weekly average. Godfrey Phillips India Ltd. (1,185.60, 3.91%) and Mastek Ltd. (2,185.30, 4.01%) were trading with volumes 13.0 and 9.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

24 stocks hit their 52 week highs,

Stocks touching their year highs included - Adani Transmission Ltd. (3,261.75, 4.89%), AIA Engineering Ltd. (2,474.65, 3.17%) and Ashok Leyland Ltd. (154.25, 3.52%).

40 stocks climbed above their 200 day SMA including Alkyl Amines Chemicals Ltd. (3,188.05, 8.82%) and Grindwell Norton Ltd. (1,890.35, 7.60%). 2 stocks slipped below their 200 SMA including India Cements Ltd. (193.80, -1.55%) and Granules India Ltd. (304.30, 1.55%).

The Baseline    
01 Aug 2022
Five analyst stock picks with revenue and profit growth in Q1FY23

As results come in for Q1, we look at companies that have analysts bullish on their prospects, and have delivered over 10% revenue and net profit growth YoY this quarter. 

  1. Larsen & Toubro: HDFC Securities maintains its ‘Buy’ rating on this construction and engineering company, but reduces the target price to Rs 2,135 from Rs 2,296. This indicates an upside of 17.9%. In Q1FY23, the company’s net profit rose 44.9% YoY to Rs 1,702.1 crore and revenue increased 18.2% YoY to Rs 35,853.2 crore.

The company beat the brokerage’s Q1 revenue and profit estimates by 1% and 1.1%, respectively. Analysts Parikshit D Kandpal, Nikhil Kanodia, and Manoj Rawat remain positive on the company’s prospects given “its record high order book of Rs 3.6 lakh crore.” They also see its plans to cut its stake in the Hyderabad metro project and revival in private capex as key positives. 

The analysts reduced their target price on account of Mindtree’s proposed merger with Larsen & Toubro Infotech, both subsidiaries of the company. Orders from India constitute 72% of the order book and 73% of all the orders are infrastructure projects, at the end of June 2022. The analysts anticipate the company’s revenue to grow at a CAGR of 13.2% over FY22-24.

  1. Coforge: Chola Wealth Direct maintains its ‘Buy’ rating on this IT consulting & software company with a target price of Rs 4,760. This indicates an upside of 20.2%. In Q1FY23, the company’s net profit rose 21.1% YoY to Rs 149.7 crore and revenue was up 25.2% YoY to Rs 1,829.4 crore.

Analyst Mugilan K expects the company’s profits to increase on the back of “strong growth in repeat business, improving order book, and increasing offshore revenues”. The analyst believes the near record-high total contract value of $315 million including two-large deal wins this quarter will boost profit growth in FY23. 

Mugilan added that executable projects in the order book stood at $745 million at the end of Q1FY23, which suggests high growth visibility in the medium term. He sees the company increasing its revenue growth guidance for FY23 to 20% or more as a key positive. He also anticipates the company’s EBITDA margin to expand 150-200 bps YoY “on account of continued offshoring, improvement in utilisation and pyramid rationalisation”, and expects the company’s profit to grow at a CAGR of 18.7% over FY22-24.  

  1. Asian Paints: Prabhudas Lilladher gives a ‘Buy’ call to this paint company with a target price of Rs 3,363. This indicates an upside of 1.2%. In Q1FY23, the company’s profit grew by 78.9% YoY to Rs 1,016.9 crore and revenue grew 53.4% YoY to Rs 8,705.9 crore. 

Amnish Aggarwal, Harish Advani, and Aashi Rara remain positive on the company on the back of market share gains in decorative paints, increased distribution, innovations & focus on high-growth waterproofing/wood finishes segment, as well as scalability plans in home décor. They added, “We expect Asian Paints to sustain premium valuations given strong growth visibility. The analysts are cautious given Grasim’s aggressive entry plans in decorative paints in FY24. The company expects commodity prices to remain volatile in the near term despite strong demand.

The analysts lower upside expectation from current levels on the stock may be because the company’s current TTM PE of 91.3, which is higher than its three-year and five-year PE ratios of  81.1 and 73, respectively.

  1. SRF: ICICI Direct retains a ‘Buy’ call on this specialty chemicals company. This indicates an upside of 12.1%. In Q1FY23, the company reported profit growth of 53.8% to Rs 608 and revenue growth of 43.9% to Rs 3,904.6 crore. 

According to analysts Siddhant Khandekar and Dhavan Shah, the company’s revenue growth was better than their estimates, led by chemicals, and packaging film segments. The analysts added, “The growth from the chemical segment was driven by robust demand for flagship products.” Operating margins for the quarter expanded 60 basis points YoY to 25.5%. The analysts believe that higher operating margins led to strong performance.

The company has planned capex of approximately Rs 560 crore towards projects like a dedicated facility to produce agrochemical intermediate, pharmaceutical intermediates, and belting fabrics, among others. Khandekar and Dhavan said, “continuous capex towards specialty chemicals on the back of higher consumption of fluoro compounds across agrochemical and pharma supports strong business performance in the years to come.”

  1. Axis Bank: Edelweiss reaffirms its ‘Buy’ rating on this bank with a target price of Rs 727, indicating an upside of 30.6%. In Q1FY23, the bank’s profit grew by 85.9% YoY to Rs 4,380.6 crore and revenue by 11.8% YoY to Rs 22,686.5 crore.

The bank’s advances grew 14% YoY to Rs 7 lakh crore, and deposits grew 12.6% to Rs 8 lakh crore. Net interest income (NII) increased by 20.9% YoY to Rs 9,384 crore, and analyst Raj Jha said that this was driven mainly by net interest margin (NIM) expansion. NIM increased by 14 basis points YoY to 3.6%.

Jha noted, “We believe this (the growth in NII and NIM) is a very positive outcome achieved through both the impact of asset repricing and changes in business mix.”  He observes that the bank performed well in terms of operating parameters and asset quality.” He adds, “We believe credit growth will remain in the mid-to-high teens over FY22-24, as the wholesale segment makes a comeback.” He concludes that eventual growth in NIM expansion should result in a steady increase in the bank’s return ratios.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne